Cost unit 2013 part 2. 24 jan

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Cost unit 2013 part 2. 24 jan

  1. 1. Diploma Project Management Captain Cook College Sharon Boyle
  2. 2.  Presentation Discussion revision through discussion around Assessment Items ◦ Assessment items for Cost Unit including structure for CMP ◦ Confirmed & agreed date for Project management meetingMorning Tea ◦ Earned Value Analysis ◦ Variations & Closeouts Work on either cost management plan or LMS questionsLunch Discuss answers for Activities 1 & 3 – leave Written/Oral to next week Continue working on LMS ◦ Tomorrow ◦ Project Meeting
  3. 3.  No. 1. Prepare a Cost management plan for Fred’s Shed – Mr Jones job and include a detailed project budget. No 2. Analyse scenario to be provided & insert into baselined budget. Note variances No 3. Provide progress report - this will include the Variance analysis from Scope & Time Units. No 4. Attend a Project Meeting where progress will be presented based on progress reports prepared in Scope, Time & cost units. Each student is required to attend the meeting, play the role requested and prepare a set of minutes.
  4. 4.  Prepare a Cost management plan for Fred’s Shed – Mr Jones job and include a detailed project budget. What is the purpose of a cost management plan? Major components? Use scaled down template provided
  5. 5.  TABLE OF CONTENTS ◦ Introduction ◦ Cost Management Approach ◦ Measuring Project Costs ◦ Reporting Format ◦ Cost Variance Response Process ◦ Cost Change Control Process ◦ Project Budget
  6. 6.  A brief scenario will be provided which impacts on time & cost. Update your budget in Assessment Item 1. Describe the impacts on the budget. Use the template but just the appropriate sections
  7. 7.  Provide progress report - this will include the Variance analysis from Scope & Time Units. Use the template provided
  8. 8.  Each student is required to attend the meeting, play the role requested and prepare a set of minutes. Date 25 January Agenda will be prepared & sent out by Jamie Everyone required to prepare minutes of meeting
  9. 9.  Project Manager - Jamie Assistant PM - Kevin Cost controller – Jerzy Scheduler - Chas Client – Mr Jones - Dennis CEO – Fred - Sylvester Note taker - Winni
  10. 10.  Remember ◦ LMS – don’t bother with Activity 2. ◦ Written/Oral for next week. Cost management plan – ◦ use structure provided or do up your own ◦ Must include budget for Fred’s shed ◦ Consider EVA after next week’s lectures & video
  11. 11.  1. Determine project costs 2. Monitor and control project costs 3. Conduct financial completion activities
  12. 12. 1. EVM an overview2. Basic Elements3. Cost Variances4. Schedule Variances
  13. 13.  Different ways of presenting information ◦ Numbers eg ◦ Graphs ◦ Analysis & indices
  14. 14.  S-curve – ◦ expenditure & income ◦ throughout lifecycle Earned Value Theory
  15. 15.  tracking tools upon which to base forecasts Integrates scope, schedule & cost Answers many questions stakeholders need Performance can be shown as ◦ Past ◦ Current ◦ Predictive Promises to reduce over-runs
  16. 16.  financial analysis specialty from United States Government programs in the 1960s, Now significant branch of project management. In the late 1980s and early 1990s, EVM emerged as a project management methodology EVM has become an essential part of every project tracking.
  17. 17.  http://www.youtube.com/watch?v=7WsfuvHe gxE
  18. 18.  Planned Value ◦ (PV) = PV or Budgeted cost of work scheduled BCWS = Hourly Rate * Total Hours Planned or Scheduled Actual Cost ◦ (AC) = hourly rate x total hours spent Earned Value ◦ (EV)= Baselined costs x % complete % Completed Planned ◦ % Completed planning =PV/BAC
  19. 19.  Cost Variance (CV) indicates how much over or under budget the project is. Why is under cost a problem? (CV) = Earned Value (EV) – Actual Cost (AC) Also CV = BCWP – ACWP ◦ Positive Cost Variance Indicates the project is under budget ◦ Negative Cost Variance Indicates the project is over budget
  20. 20.  Cost Variance % - how much over or under budget the project is in terms of percentage CV% = CV/EV ◦ Or CV% = CV/Budgeted Cost of Work
  21. 21.  CPI = EV/AC Shows how efficient we are Above 1 good efficiency Below 1 project not using resources efficiently
  22. 22.  TCPI = Total Budget – EV/Total Budget – AC Another measure of efficiency – ◦ The correct people do the correct things within a clear process ◦ Above 1 utilization must be stringent ◦ Below 1 lenient.
  23. 23.  Schedule Variance (SV) = Earned Value (EV) - Planned Value (PV) How much is yet to be completed as per schedule +ve Schedule variances = we are ahead of time -ve Schedule variance = we are behind schedule Then same % as for Costs
  24. 24.  Budget at Completion = total budget BAC = Baselined effort hours x hourly rate Estimate to complete – just what it says. Estimate hours required x hourly rate
  25. 25.  http://www.youtube.com/watch?v=7WsfuvHe gxE&feature=related
  26. 26.  Activity 1. Activity 3.
  27. 27.  Conduct appropriate close out activities ◦ Has everyone been paid? ◦ What about the variations? ◦ Where do we stand? ◦ Detailed records must be kept ◦ Any lessons learnt?

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